Robocop – Not Just an ‘80s Movie Icon

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Jeremy Clopton, CFE, CPA, ACDA
Senior Managing Consultant, Forensics and Valuation Services, BKD, LLP

Yet another 1980s movie icon is making a comeback. However, this is not your typical remake. Robocop is back, and geekier than ever. You read that correctly, Robocop has gone geek. In a recent Fortune article, the SEC’s new accounting quality model, Robocop, takes center stage. The SEC is going to begin using data mining procedures to identify companies with accounting records deserving a closer look. As a data mining professional, I found a few things in this article surprising, noticed some items not discussed and saw positive news for companies that may encounter Robocop in the coming years.

First, I don’t find the fact the SEC will be using data mining surprising. In fact, this is something I expected. What is surprising is the list of atypical parties encouraged to use data mining now that the SEC has unveiled its model. These include:

• Employees questioning their employer’s behavior are encouraged to use data mining to see if they are “on the right track.” 
• Investors looking to analyze the financials of potential investments and make decisions that are more informed. 
• Companies wanting to analyze the financials of the vendors and customers with which they do business. 

Next, here are a couple of useful items to supplement this article. First, internal audit departments of organizations should also be users of data mining. The principles discussed in this article can help internal audit departments take a proactive approach to fraud detection and increase their effectiveness. If they are not already using data mining, the SEC’s use is a good reason to begin. Also, there is data analysis software available that does not require programming language or experience. Many organizations may already use these tools within their governance, risk and compliance program, possibly within the internal audit department.

Finally, there is good news for companies subject to Robocop’s review. Data mining is not a new concept; it has been around for quite a while. Fraud investigators have been developing data mining procedures for years and regularly implement these procedures within investigations. As a result, there are many resources available to companies looking to incorporate data mining into their testing and ease the learning curve. These resources can help companies implement their own data mining procedures and take a proactive approach to detecting potential issues in their financials.

If you have not been reading about Robocop and the new accounting quality model, I would encourage you to do so. The Fortune article is a great place to start, with many other articles out there to provide other insights.

Fraud Conference is a News Maker

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Scott Patterson
ACFE Senior Media Relations Specialist

When most people think about conferences, they conjure thoughts of chilly meeting rooms and PowerPoint presentations. Name tags. Perhaps some dry “trade talk” and (you hope) some free swag. These events are important for our professional development – but let’s be honest, for anyone not involved, a conference isn’t exactly headline-grabbing news. Unless it’s the ACFE Global Fraud Conference, that is.

There are always a number of journalists covering the annual event, and this year was no different. They came to report on the latest trends in cyber fraud, online investigations, interviewing techniques and other cutting-edge issues in our profession. Not only that, they wanted to hear what our keynote speakers had to say to thousands of fraud fighters who hung onto their every word. This year saw even more media coverage than usual, including live reporting by CNBC and on-location coverage from Fortune, Forbes, Accounting Today and other venues.

When CNBC set up their cameras to film the ACFE’s Cressey Award-winner Preet Bharara on the opening day of the Conference, they anxiously waited to see what breaking news he would announce from the podium. Bharara, U.S. Attorney for the Southern District of New York, didn’t disappoint: During his speech he revealed that the 2nd Circuit issued its ruling on the Raj Rajaratnam (currently serving 11 years in prison) appeal by upholding the conviction – a statement that was met with enthusiastic applause from the audience.

Forbes blogger Walt Pavlo and Accounting Today editor-in-chief Michael Cohn attended breakout sessions and covered a variety of aspects of the conference. Peter Elkind, Fortune editor-at-large and co-author of The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, was on hand to see Andrew Fastow deliver the conference’s closing keynote address.

The Fastow appearance created a lot of buzz around the Conference. It was his first public appearance before a large audience and the media. Though his speech was not videotaped, as per his request, CNBC reported live (on-location from the conference) immediately following his address with reaction to his revelations and admissions.  

CNBC reporter Scott Cohn and his crew stayed through the entire Main Conference, talking with speakers, attendees and exhibitors. The result was a great clip produced for PBS Nightly Business Report that covered the event as a whole, a summation of the largest gathering of anti-fraud professionals in the world included in a segment titled, "Financial Fraud Fears."

It’s exciting to see the media sharing the experience of the ACFE Global Fraud Conference with the rest of the world. It just helps illustrate that it’s not only a conference – it’s an event.

Read all of the news coverage from the Conference.